Importance of Saving money

I always suggests people to save money and have some fixed percent of income for savings. Some of them took my advice, some of them didn't but realized it lately and some of them ignored it and not realized it yet.Those who realized it later asks me for suggestions.

Many people in our country would have realized it in the recent recession. But for those, who still didn't realized it, no one can save them especially when we are in another recession before recovering from the previous recession. There are plenty ways to save money.

Prepare a budget every month. This will help you in analyzing your expenses and avoid unwanted expenses. Budget is an important tool to manage the money for every family. Write down all the upcoming expenses for a month in the budget and work accordingly. Also note down each and every penny you spend throughout the month and then compare it to your budget.

Contribute to your retirement and savings account as much as possible. Also invest some part of your money anywhere you like. Read other posts. You will get some ideas for savings and investments. If you want some tips then contact me in Ask Me section.

5 Tips to Save Money and Get Out of Debt

Debt

Even in this period of economic turmoil, becoming debt free is absolutely possible. If you have guts to work out a comfortable payment plan with your creditors and can say no to unnecessary spending, the game can be yours. If you want to stay out of debt, you have to be disciplined, make a budget planning and do some sacrifices. If you begin with a few short goals and undertake some new habits, you will essentially become a debt free soul within a short period of time. To get the debt free status budgeting is far better tool than the so-called bankruptcy or debt settlement programs, which grab your leftover money instead of making you debt free. Below are a few tips to manage your finances more carefully and avoid falling debt.

1. Keep Track of Expenses with Budgeting and Expense Tracking Software: You can seek help from a plentiful of computer software programs that are easily available these days to track your expenses. Among these softwares, Quicken, Account Xpress and Budget Express are a few reliable one. These budgeting softwares will help you know better, where your money is going and where you have to cut back. Always keep an emergency fund for unexpected expenses like house repairs and medical costs.

2. Change Lifestyle to Reduce Expenses: If your income is a single penny and your monthly expense is a dollar, it is time to consider changing lifestyle and shed expenses, which are tempting debt. You can do so by either taking public transport or by giving up the extra cocktail before sleep.

3. Remain clear to yourself and Avoid Falling in Debt: The magnificent designer clock may seem urgent; however, you should avoid it as it is capable of driving you deeper toward debt. Know the difference between needs and wants, and avoid buying anything on impulse. Avoid using your credit cards anywhere and everywhere if it is not urgent. Always use cash while buying and erase any anxiety of accumulating too much debt.

4. Make a Grocery Budget and Stick to It: It is easier to stick to the food budget when each item is written down with prices included. If you do not know the prices, prepare a rough estimate and rectify the next time you visit the shop.

5. Cut Down on Take-out and Avoid Impulse Buys: Reduce buying prepared food, and instead of that cook homemade meals. If you are running short of time, prepare some of the meals before and freeze them so that those can be heated in the microwave when needed. Have some snacks while visiting muffins, apples or granola bars and avoid fast foods like donuts, fries or burgers.

Money Hack Tips

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We had already discussed about some money saving tips and I thought it will be good to discuss about more tips for saving money.

1.       Stay home: The more you stay at home the more you save the money. Enjoy your days in home. Stay in home during the weekends.

2.       Make a list: Stick a paper in your kitchen or bed room. Note down each and everything you want to buy. You can track your expenses. At the end of the month analyze it and check out the any unwanted expense.

3.       Wait for a week: If you want to buy something, wait for a week. In a week you can realize its importance. Another important point in waiting is that you won’t have the same excitement that you had a week ago but you will use it effectively.

4.       Avoid watching Advertisings: Don’t watch the advertisements. All kind of advertisements like  TV advertisements, email announcement, road side banners etc.  That will tempt you to buy a something you don’t want.

5.       Use cash: Use cash wherever possible. We have already discussed about the benefits of using cash for credit cards. Try to avoid cards as much as possible.

 

Personal Budget

Budget

Personal budget is a finance plan that allocates future personal income towards expenses, savings and debts. Personal budget is an important tool for everyone. You don’t get rich by earning more; you get rich by using it wisely. You might have heard about many people who earned more but got poor because of their spending habit. If you plan well, you can satisfy all your needs and save some of your earnings. It also helps you in finding out all your extra spending.

There are several tools available for planning your personal budget. Many websites provide software for budgeting and help in managing personal finance. If you have any doubt in preparing your personal budget or want to know the percentage of allocation, you are free to contact me in Ask Moran section. I will help you in preparing your budget. Find out the percent of income to allocate for different categories like house, savings, medical etc. Many people have suggested different percentage of income for different categories. It’s always suggested to allocate a minimum of 20% of your monthly earnings towards savings.

Set a goal for every budget. Your budget should be flexible and easy to understand. Analyze the ways the money is going out and try to block them.  Your debt should not be more than your previous month’s debt. If it is exceeding then try to cut down your expenses but don’t reduce your savings. Track all the expenses and make sure that no money is spent on the extra cost.

Problems with Credit Card

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Credit card is just a small plastic which helps people to buy goods and services . It helps in buying without having the money. But do we really know about how it causes our life. We will spend more if we use the credit card. We feel the money going out of our pocket when we use cash but we don't feel the same when we use the credit card. A study shows that people spend 47% more while using the credit card. Just think what you can do with that much money. 

I don't prefer using a card and if you want to use a card then use debit card.You may think that you can beat the system by paying the money in time (the fact is  many people don't pay in time) but you can't beat the system.

With the increase in purchasing power the spending tendency of the people also increases. The useless thing also may look important to us. If you want, you can check it by yourself. Use credit card for 1 month and note down all the spending in a paper. In the next month use cash for all purpose and note down the spending in a paper. Then compare both the papers and you will realize the truth. If you still want to use the credit card then think whether the stuff you are going to buy is useful to you or not each and every time before you use your credit card. Pay your debts in time. For money saving tips read my post on save money. You can have your life with credit card but you will have better life without a credit card.